Can the Comex metals rally from here given that the CoT structure is not yet fully “washed out”? Of course they can! While it’s sometimes easy and obvious to assume that rallies are imminent by the CoT structure, history shows us that a fully-washed CoT isn’t imperative for a bottom and rally.
Let’s start with an example of a full wash, rinse and spin in Comex gold. Note the all-time lows of December 2015. That’s as clean and washed as you’re likely ever going to see.
DATE PRICE COMMERCIAL NET SHORT 12/1/15 $1060 2,911 (ALLTIME LOW) 5/3/16 $1290 294,901 5/31/16 $1210 214,038 7/5/16 $1375 340,207 (ALLTIME HIGH) So, in this example, if you were waiting for a full CoT washout in May of 2016, you missed a $165 move in June.
This post was published at GoldSeek on Wednesday, 22 November 2017.